A Health Care Ruling Q&A

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In the light of day, a few things about yesterday’s health care court decision are coming into focus. The White House clearly expected federal Judge Henry Hudson to rule the individual mandate unconstitutional. The judge telegraphed his intentions in earlier comments and the Administration was ready with talking points about how Hudson’s ruling was only one of three in the federal courts so far. (Two other judges decided the individual mandate is constitutional.) Secondly, Virginia Attorney General Ken Cuccinelli is an ambitious fellow. Then again, we already knew that too. He has already started fundraising off yesterday’s court decision.

But some other pieces of this story aren’t well understood yet. Here’s a look at some of the questions swirling around the Beltway and blogosphere today.

What effect will Judge Hudson’s ruling that the individual mandate is unconstitutional have on congressional repeal efforts?

Likely none. House Republicans are determined to offer and vote on a piece of legislation to repeal the Affordable Care Act and nothing will deter them. The political effect of Hudson’s ruling is that it creates an environment in which Republicans can claim the law is in limbo. This gives Republicans a legitimate reason to resist implementation where they can – namely at the state level.

Is Hudson an impartial jurist?

Is any political appointee? As the Huffington Post reported back in July, Hudson owns a stake in a GOP consulting firm and received tens of thousands of dollars in “dividends” from the company, called Campaign Solutions. The firm’s clients include Virginia Attorney General Ken Cuccinelli, who spearheaded the health reform lawsuit in Hudson’s courtroom. Campaign solutions says Hudson is a “passive investor.”

Are Republicans really in bed with the insurance industry?

Not if this lawsuit is any guide. The individual mandate is the one piece of the Affordable Care Act health insurance companies absolutely love. It’s what guarantees them a flood of new customers beginning in 2014 – right around the time baby boomers start leaving the market and aging into Medicare in droves.

Can the Affordable Care Act work without the individual mandate?

Probably. Several wonks have proposed alternatives to the mandate, including Paul Starr, who suggested that Americans who decide to opt out of the health insurance system automatically forgo the right to a policy guaranteeing coverage of pre-existing conditions and access to federal subsidies to help them buy coverage. Another suggestion I heard at a health policy conference last year would create a national open enrollment window. If someone decided to “go naked” and forgo coverage, they could still buy it when they got sick. But if this happened outside the open enrollment period, insurers would have the right to set premiums based on risk.

What happens if only the individual mandate is scrapped and it’s not replaced with something else?

Ezra Klein writes today in the Washington Post that the outcome could well be something liberals love and conservatives hate – single payer. I think that might be a stretch, but it’s worth participating in Klein’s thought experiment. Let’s say there’s no individual mandate, but insurance regulations somehow survive. Insurers still have to offer coverage to everyone and they can’t set premiums based on health risk. Republicans, still bent on a repeal-only strategy, refuse to agree to a policy alternative to the mandate. With people buying coverage only when they get sick, premiums for everyone skyrocket as a result – like 20 to 50%. There is a huge public backlash and a call for major reforms. What are the solutions? Again allow insurers to exclude sick people? Create a public option?

In a recent briefing with reporters, White House officials conceded that the individual mandate is probably inextricably linked to the major insurance reforms known as guaranteed issue – insurers must sell to everyone – and community rating – prices can only vary by age and geography. But this backs Republicans into another equally undesirable corner – scrap the mandate and you scrap the most popular provisions in the Affordable Care Act.

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